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Farm Bureau Insurance Reports Positive Results for 2016

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Published: 04 April 2017

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Stock prices rise, dividends voted

Based on the year’s outcomes, the stock price for Tennessee Farmers Life was announced at $55.03 per share. The company’s directors voted a 3 percent dividend and offered to purchase up to 200,000 shares. Stockholder equity increased 12.6 percent over the previous year.

Tennessee Farmers Assurance Company’s stock price was announced at $20.88 per share. The directors authorized a 3 percent dividend and the purchase of up to 200,000 shares. Stockholder equity increased 10.3 percent year-over-year.

P&C posts profitable year

Despite weather patterns closer to normal than the calm of recent years, Property and Casualty Operations posted gains fueled by unit growth and customer retention, said P& C Operating Officer John Law.

Automobile retention climbed to 97.4 percent, and homeowner and farmowner retention remained steady at 91.4 percent and 94.9 percent respectively. The number of autos and properties insured grew by 39,998 units.

Auto and property losses were 64.1 percent of each premium dollar, while company expenses totaled 23.2 percent. The combined ratio of 87.3 percent compares favorably to 100.7 percent for the P&C industry and is the fourth consecutive year less than 90 percent.

While TFMIC turned an underwriting profit for 2016, largely on the strength of low operating expenses, the automobile insurance industry struggles with profitability as a whole. A nationwide trend of distracted driving is combining with soaring repair costs to drive auto losses dramatically upward, Law said, and these factors are placing pressure on carriers to increase rates.

Property losses rose in late November as a wind and wildfire event ravaged East Tennessee, Law reported. There were 1,616 wind claims for $15.8 million, and 246 fire claims for $31.2 million in the Gatlinburg area, Law said. “This is where our hearts lie: in helping Tennessee Farm Bureau families at the times when they need help the most,” Law said.

The operating results allowed Tennessee Farmers Mutual Insurance Company to add $231 million to surplus. The surplus-to-premium ratio was $2.05, clearing the two-to-one mark for the first time in company history.

Life Company continues growth trend

Life insurance premiums grew to $149.5 million, an increase of 4.8 percent over the previous year, said Neal Townsend, chief operating officer for Life Operations.

Tennessee Farmers Life Insurance Company agents wrote 44,154 life insurance applications for $4.5 billion in face value, and 2,134 annuity applications. The life company now has $34.6 billion in force, an increase of 4.9 percent over 2015.

Policyholder capital and surplus increased by $43.3 million, and increase of 11.5 percent year-over-year. Total assets grew to more than $2.2 billion, an increase of 5.3 percent.

The company’s mortality experience was 49.9 percent of expected, falling within the company’s ongoing goal of 65 percent. During 2016, Tennessee Farmers Life paid 1,321 death claims for a total of $60.5 million.

“We have financial stability, strong risk management practices, competitive products, professional and experienced agents, and dedicated home office co-workers who have positioned us to meet the needs of our Farm Bureau customers,” Townsend said.

Townsend also reported the sale of Generation Life Insurance Company to Swiss Re, a reinsurance company headquartered in Zurich, Switzerland.

About the ‘Farm Bureau Insurance of Tennessee’ companies

Tennessee Farmers Mutual was founded in 1948 to insure automobiles, homes, farms and personal property. Tennessee Farmers Assurance is a stock company established in 1991 to provide additional capital for the property and casualty operations, and to give investors an equity opportunity linked to the mutual company’s success. Tennessee Farmers Life is a stock company founded in 1973 to sell life insurance.

The property and casualty mutual company insures more vehicles and properties than any other insurer in Tennessee, and the life company is the state’s largest writer of individual life insurance.

Coverage is available to Farm Bureau members at 183 locations throughout the state; all Tennessee residents are eligible for membership in the organization. Additional information is available at fbitn.com.